Free MTD software and its limitations

"Free" MTD software is rarely cost-free in practice. Many zero-price tiers hide turnover caps, banking tie-ins, property limits, or missing Final Declaration features that force a paid upgrade once your affairs grow.

Paid software typically adds bank feeds, multi-user access, agent collaboration, legislative updates, and support. For diversified or growing businesses, a modest subscription often costs less than mid-year migration or retrospective record fixes.

Named free and near-free options

• Zoho Books: Free for turnover strictly under £35,000 — full MTD ITSA, bank feed, invoicing. A trap for Phase 2 (£30k+) taxpayers who grow past £35,001.
• FreeAgent: Free with active NatWest, RBS, Ulster Bank, or Mettle business banking (worth up to ~£150/year). Mettle requires at least one transaction per month or billing reverts to paid.
• SumUp + Sage: Free MTD ITSA for sole traders inside the SumUp payments ecosystem — strong lock-in if you later outgrow their hardware and accounts.
• Landlord Studio: Free tier capped at two properties — upgrades needed for minor portfolio growth.
• Clear Books Free, QuickFile, My Tax Digital: Basic sole-trader or landlord coverage; check Income Tax (not VAT-only) and Final Declaration support.
• HMRC tool: In development for very simple sole-trade or UK-property cases only — not a substitute for most mandated taxpayers yet.